Games and Gadgets Driving E-Commerce

Games and Gadgets Driving E-Commerce

AUGUST 6, 2007

Retail e-commerce could hit $200 billion in 2007.

Retail e-commerce grew 23%, to $27.2 billion, during the second quarter of 2007 over the same period in 2006, according to a comScore Networks press release issued in July.

comScore also said that total US e-commerce spending including travel climbed 19%, to $47.5 billion, during the second quarter.

Total US online consumer spending reached $170.8 billion in 2006. comScore estimates that it will reach $200 billion in 2007.


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"Retail e-commerce rebounded solidly in the second quarter after a
modest start to the year," Gian Fulgoni, chairman of comScore, said in
a statement. "After posting 17% growth versus year ago in Q1, retail
e-commerce sales grew 23% year-over-year in Q2, matching the growth
rates we’ve seen during the past couple of years."

Online sales of video games, consoles and accessories grew by
159% in the second quarter of 2007 over the same period in 2006. Sports
and fitness and consumer electronics sales also grew by more than 50%.

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"Even factoring in the moderate growth rates from Q1, we’re
currently on pace to break $200 billion in e-commerce spending in
2007," Mr. Fulgoni said in the statement. "However, in the past we’ve
seen growth rates accelerate as the year progresses, culminating with
the online holiday shopping season, so $200 billion may actually turn
out to be a conservative estimate."

eMarketer, comScore and Cowen and Company use quarterly retail e-commerce sales estimates from the US Department of Commerce as a baseline for deriving their sales estimates and forecasts. This explains why their numbers closely converge.

Forrester Research,
on the other hand, includes online categories that are not part of the
Commerce Department’s estimate, such as event ticket sales and perhaps
even gross merchandise sales from online auctions. The latter could
explain why Forrester’s figures are consistently about $30 billion more
than the other estimates.

JupiterResearch does not publicly disclose what categories are included in its forecast.

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"comScore’s data comes on the heels of Amazon’s forecast that its
sales will grow between 29% and 34% this year," eMarketer Senior
Analyst Jeffrey Grau said. "eMarketer’s 2007 sales forecast of 21%
growth, which is bullish compared to other forecasts, may end up being
right on target."

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